U.S. markets show strength as commodities rebound, Apr. 22-26

Investors took comfort in the fact that unemployment claims in the U.S. fell more than expected and that helped bolster all three of the big indices south of the border for the April 22-26 period.

The Dow Jones Industrial Average was up 165 points to 14,712.55 points, the S&P 500 was up 27 points to 1,582.24 and the NASDAQ was up 62 points to 3,279.26. For the first time in a while, resource stocks served as an aid, not a drag, to those gains as new signs of life in the oil, copper and gold price helped miners make gains after several periods of poor performance.

Pretium Resources was one such company. The junior explorer with a key asset in B.C. had a strong run thanks to a sizeable investment from the resource branch of Liberty Mutual Insurance. Liberty Mutual Metals & Mining Holdings bought $40 million worth of Pretium equity and that helped send the junior’s shares up 20% to $7.13 for the period. The money is set to go to its Brucejack project in northern B.C. where it will complete a bulk sample and an underground drill program. Liberty will nominate one person to the company’s board of directors. The move by Liberty furthers its recent investments in the junior mining space as the company has made significant investments in Alderon Resources and Red Eagle Mining over the last seven months.

A tungsten discovery by Tanzanian Royalty in north-west Tanzania attracted positive market interest as well. The company’s shares were up 14% to $2.99 after it said it encountered grades of up to 0.40% Tungsten oxide from 23 grab samples. The samples were taken from trenches and outcrops leading the company to believe the area could host tin, tungsten, wolframite and lithium. The mineralization was found in the Kyerwa tin fields of the Karagwe-Ankolean Precambrian belt around mica rich intrusive granites. The Kyerwa tin fields are roughly 8-km wide and 48-km long.

Cliffs Natural Resources also enjoyed a strong period on the back of its quarterly results. The company’s shares were up 14% to $20.17 despite reporting that first-quarter revenues of US$1.1 billion were off 6% compared to the same period last year. The lower revenues were driven by a 10% decrease in global iron ore sales, which contributed to a 2% decrease in cost of goods sold to US$903 million. Investors preferred, however, to focus on a still impressive profit of US$97 million, which was helped by the company’s ability to cut selling, general and administrative (SG&A) expenses by US$11 million to US$48 million, while its North American Coal division managed to keep cash costs at just US$91 per ton. Cliffs also offered good news going forward, as it said it expects full-year U.S. iron ore sales volume to be to 21 million tons